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Egypt Stops Cotton Imports to Boost Local Crop

In a bid to boost its domestic cotton sector, Egypt says it will cease all cotton imports—a move seemingly in conflict with its earlier decision to stop support for farmers.

Egypt’s government announced in January that it would no longer provide financial support for cotton growers because of high costs to grow the commodity and the low demand for it.

The market for the country’s high-quality, extra-long staple cotton has been on a downswing and even Egypt’s own textile manufacturers are opting to offer lower quality products made from cheaper raw cotton.

Farmers in Egypt were warned at the times of the ceased subsidies not to grow the crop unless they already had contracts in place for sales. The cotton growers were instead asked to grow more short and medium staple varieties to support Egypt’s industry, which the chairman of the Egyptian Chamber of Textile Industries said would suffer because of a lack of cheap cotton imports, according to Reuters.

Egypt brings in cotton primarily from the United States, Greece, Burkina Faso and Benin.

In addressing the move to halt imports, Egypt’s agricultural ministry said in a statement, “The decision aims to protect local production of cotton and resolve its marketing problems,” adding, according to Reuters, that, “The ministry is keen on Egyptian cotton regaining its glory on all levels.”

For the second quarter of the 2014-2015 agricultural season (Dec. 2014 to Feb. 2015) Egypt’s cotton exports rose 94.3% year-on-year to 55,000 480-lb bales owed to lower Egyptian cotton prices.

Domestic consumption in the period also saw an uptick. According to a statement from Egypt’s Central Agency for Public Mobilization and Statistics (CAPMAS) when the second quarter results were announced in May, local cotton consumed rose 115.5% to 39,500 bales.

“The increase is due to the direction of local spinning and cotton companies to decrease amounts of imported cotton,” the Daily News reported citing the CAPMAS statement.

Egypt expects the move to stop exports will naturally lead to an expansion in imports to the country.

Any cargo carrying cotton that was shipped before July 4 will still be accepted, according to the agriculture ministry.